Fundsmith founder Terry Smith raises £ 150million as company posts record profits


Fund star Terry Smith wins £ 150million: biggest salary to date for Mauritius-based stock picker as his company grows record profits

Fund manager Terry Smith has pocketed an exceptional salary of up to £ 150million, making him one of the highest paid bosses in the global financial industry.

The Mauritius-based stock picker, who founded Fundsmith 11 years ago, celebrated record profits in the 12 months leading up to March 2021.

Even though its £ 22.7bn flagship Fundsmith Equity underperformed the average of its rivals during the year, the company made total profits of £ 57.7m, up from 48. £ 5million a year earlier.

Maurice-based stock picker Terry Smith (pictured), who founded Fundsmith 11 years ago, celebrated record profits in the 12 months leading up to March 2021

Fundsmith was stimulated by investors looking for a place to put money saved during foreclosure.

Over ten years, Smith’s flagship fund has been one of the UK’s leading silver producers.

Ryan Hughes, head of investment research at AJ Bell, said the cash flow to Fundsmith helped drive strong earnings.

He said: “While the size of these rewards may raise eyebrows, investors tend to be quite optimistic about it as performance remains very strong and they feel they share success.”

In the year to March 2021, Fundsmith Equity would have turned £ 1,000 into £ 1,318 – although this is less than the £ 1,451 made by the average global sector fund of the Investment Association.

Since its launch in 2010, however, it has blasted rivals out of the water, turning £ 1,000 into £ 6,722, up from an industry average of £ 3,543.

Hughes said: “I am sure investors will still be happy with over 20% growth for the year.”

The biggest holdings in Fundsmith Equity include Microsoft, L’Oréal and Paypal. Smith also manages several other funds, including Sustainable Equity and the Smithson and Emerging Equities investment funds.

Smith, 68, pocketed just over 60% of the £ 57.7million in profit Fundsmith generated during the year. The rest was shared among the other owners of Fundsmith.

But he also sent £ 188.1million in “fees” to an opaque company in Mauritius, Fundsmith Investment Services Ltd (FISL) of which Smith is also the majority owner.

He does not make his accounts public and a spokesperson declined to comment on the use of the £ 188.1million.

But Smith could have pocketed as much as 61%, bringing his total salary to £ 150.4million. It is understood that the sum is unlikely to be this large as part of the money sent to FISL was spent on services such as research, administration and accounting.

Ben Yearsley, Director of Shore Financial Planning, said: “In a way, I have no problem with what Terry Smith is getting paid. He has built a very successful business. But I don’t like the secrecy surrounding the Mauritian structure.

Yearsley added that Fundsmith Equity was also relatively expensive in terms of the “ongoing charges” that savers have to pay.

Smith, the son of a London truck driver, made his name in the 1980s as a banking analyst before getting into controversy at brokerage BZW, urging investors to sell shares in his parent company , Barclays.

In the 1990s, while working for Swiss investment bank UBS, he wrote a bestselling book about dirty accounting tricks used to make troubled companies look like they were successful, for which UBS wrote. dismissed.

The Brexit-backed father-of-two then took over stockbroker Collins Stewart, merging him to create Tullett Prebon. He traveled to Mauritius in the Indian Ocean in 2014, to escape the noise and routine of the city.


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